‘It’s not convincing’ – Togbe Afede XIV reacts to BoG’s explanation for high monetary policy rate

Togbe Afede XIV, the Agbogbomefia of the Asogli State, has called out the Bank of Ghana (BoG) regarding its maintained high monetary rate. According to him, the reasons given by the central bank for the recent high monetary policy are not convincing. On March 25, 2024, the Monetary Policy Committee (MPC) of the Bank of Ghana decided to maintain the policy rate at 29%, citing persisting upside risks to inflation. Reacting to this, Togbe Afede maintained that the country's inability to achieve and maintain low inflation is due to supply-side, rather than demand-side factors. 'BOG's 'mopping up excess liquidity' explanation for its high monetary policy rate is not convincing. 'Excess liquidity' presumes a certain optimal liquidity that has still not been defined. Secondly, supply-side rather than demand-side factors are at the root of our inability to achieve sustained low inflation. "Thirdly, it is difficult to persuade people to save when they are struggling to make ends meet,' Togbe Afede explained. Tog be Afede, who once served as a board member of the Central Bank of Ghana, from 2003 to 2013, also questioned why the International Monetary Fund (IMF) insisted on these high-interest rates that have not worked for Ghana in close to two decades. 'It is surprising, therefore, that the IMF insists on these high-interest rates that have not worked for us, the reason why we are engaging them for the seventeenth (17th) time!' he pointed out in a statement. Source: Ghana Web